Downside Risks Remain Elevated in World Economic Recovery: IMF and World Bank
The world economic recovery is proceeding broadly as expected, although downside risks remain.. At a press conference in Washington, senior officials with the International Monetary Fund and the World Bank said major challenges remain in order for there to be economic recovery; stronger concerted efforts in international coordination and cooperation. Our Washington correspondent Shanshan has the story.
The International Monetary Fund and the World Bank are to hold joint meetings in Washington over the weekend. They are seen as an important opportunity for the two organizations and their member countries to assess the crisis two years on. They will discuss world responses and try to anticipate future challenges and opportunities.
Prior to the meetings, IMF Managing Director Dominique Strauss-Kahn portrays the world economy as moving upward, but fragile.
"The recovering is going on, but very fragile. It's fragile partly because it's uneven. When you look at Asia, South America, you see very high rate of growth. And for these parts of the world, the crisis is over. Even if you look at Africa, where the rate of growth is going back in south-Sahara Africa to something like 5 percent. But in Europe and the United States. Europe is sluggish, and the United States where the situation is uncertain."
According to the latest World Economic Outlook released before the IMF and World Bank meetings, global activity is forecast to expand by 4.8 percent this year. Output of emerging and developing countries is projected to expand at a rate of 7.1 percent this year, while in advanced economies, growth is projected to be only 2.7 percent.
World Bank President Robert Zoellick says the good news is that the world economy is recovering particularly,developing countries.
"One particular bright spot has been the growth in developing countries. They are growing at a faster pace than developed countries. Developing countries are expected to account for about one-half of global growth in the several years ahead. I think the Chinese growth has been very important in this recovery, and I think it had a very strong and effective stimulus program. "
However, both IMF and the World Bank still see risks ahead but,they don't expect a "double-dip" recession. As IMF Managing Director Dominique Strauss-Kahn sums up, there are four challenges to the economic recovery.
"The first one has to do with sovereignty debts. The second is that at the global level the growth is coming back, but not enough. We need growth with jobs. The third has to do with financial sector reform. A lot has been done on the regulation side, but we also need to do a lot on supervision and crisis resolution. In the last two fields, very little has been done. And the last point, I think it's fair to say the momentum of economic cooperation at the global level is decreasing. That's a real threat."
World Bank President Robert Zoellick emphasises international cooperation.
"Tensions can lead to trouble if not properly managed. The recent crisis is still affecting jobs and livelihoods across the world. If ever there were a time that we should not turn our backs on international cooperation, it is now."
IMF and World Banks officials say international cooperation is more crucial now than it was at the height of the crisis.
For CRI, I am Shanshan in Washington.